Another day spent in the same trading range 63/64 as the specs start getting a bit more aggressive near the close. Market continued to trade on light volume as the market is waiting for next weeks reports on S&D and the Federal Reserve.
The stock market liked the comments made today by the President in the fight to limit foreclosures with another 1.8 million homes in the sub-prime category set to reset rates in 08/09.
Overall, the markets look to be heading toward a strong year end close as the Fed rate cut is most likely to take place next week. Combined volume for futures was just over 12,000 and options of only 11,000 as the market continues to trade in a narrow range.
The sales and export report this morning was close to the 4-week average with 240k in sales and 230k in shipments. There were some rumors after the decerts last week that this number would be on the higher side, but the market continues not to see big demand with NY at these levels.
However, wheat, corn and soybeans saw much lower sales coming in 30-40% under the 4-week averages which may have put some pressure on the grains. The dollar fell slightly as oil and metals found a bit of a boost and the stock market continues to rise after bottoming out last week.
We are approaching the 9-day moving average and the market continues to find good scale down buying near 63.00. RSI is about 37% and the specs are only 18% long. Depending on the dollar and if demand remains steady, we may be looking at a good buying opportunity short term.
However, the market is driven currently by the specs and technically the market still looks weak and this may limit the upside potential short term. The market will find resistance at 64.55 and 65.20 with support at 63.70 and 62.85.
marketing@alchempro.com
